What Is Umbrella Insurance, and Do I Need It?

What’s Umbrella Insurance?

Massachusetts Umbrella Insurance does exactly what its name implies: It offers Extra Protection.

It’s an extra layer of liability insurance; something you buy in addition to the liability insurance you already have in your Mass Homeowners / Home and Car  / Auto Insurance Policies. And what does liability insurance do? It pays people you accidently harm.

So, if you think of a jacket as your existing liability insurance, an Mass Umbrella Policy is there to give you even more protection.

Most people don’t need an Mass Umbrella Policy because they’re adequately insured by their Mass Homeowners / Home and Mass Auto / Car Policies. So who does? In a word, rich people. The minimum umbrella policy is typically a million bucks!!

Massachusetts Umbrella Insurance Policies kick in after your other insurance, like your car or home coverage, is used up. They might also cover things your existing policies don’t, like maybe libel or slander.

Example: Say your Doberman bites one of your party guests, and they sue you for a $1 million. You have a Massachusetts Homeowner’s Policy, but your liability insurance tops out at $500,000. In this case, your umbrella policy will pay the remaining $500,000.

Because umbrella coverage only kicks in after your regular policies give out, it’s not very expensive. According to the Insurance Information Institute, the average cost for $1 million of coverage is only $150 to $300 per year.

Insurance Minimum Limits: 

Are you wasting money buying more than the bare minimum auto insurance, expecting the Umbrella policy to kick in if a settlement goes beyond your auto policy limits?

If you have a umbrella policy, maybe you should just buy the bare minimum liability on your car and home policies??  NO, Just one problem The Insurance Companies writing these policies won’t let you do that. To get Umbrella Insurance, you’ll typically need a Homeowners Policy with a minimum of $500,000 in liability coverage and a Car / Auto Insurance Policy Limits of at least $250/500 Insurance Limits!!

In short, until you meet the minimums set by the insurance company for your Auto Insurance and Homeowners Insurance Policies, you won’t be able to get Umbrella Insurance.

A Preferred Personal Umbrella covering one house and two
vehicles often costs less than $225 in annual premium for
$1,000,000 of additional liability coverage.

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